Firms should leverage EU-Singapore FTA perks: Chan Chun Sing

Singapore

WITH the European Union-Singapore Free Trade Agreement (EUSFTA) entering into force today, Minister for Trade and Industry Chan Chun Sing encouraged the Singapore business community "to look at how they can leverage the benefits that the agreement will bring" in a Facebook post on Wednesday night.

These benefits include the elimination of tariffs, reduced technical barriers, and improved access to the EU services sector and public procurement. Small and medium enterprises in particular will gain from simplified procedures at Singapore customs, less burdensome technical rules, and simplification of rules of origin, said European Chamber of Commerce Singapore president Federico Donato.

The agreement provides "a solid foundation for Singapore and the EU to take our economic partnership to the next level", said Minister-in-charge of Trade Relations S Iswaran.

Said EU Commissioner for Trade Cecilia Malmström: "This agreement will enhance our bilateral relationship, boost the EU's commitment to Asean, and is a sign of strong support for the rules-based international order."

Launched amid the global financial crisis and coming into force in an uncertain global economy, the EUSFTA "signals the EU and Singapore's shared conviction that open and global rules-based trade is the path to growth and prosperity", said Prime Minister Lee Hsien Loong.

It is expected to benefit the region and serve as a pathfinder for an eventual EU-Asean FTA. Said HSBC Asia-Pacific head of global trade and receivables finance Ajay Sharma: "As materials sourced within Asean could now be accepted as originating in Singapore, EUSFTA would further knit Asean together, harnessing its potential as a manufacturing hub and enhancing its overall competitiveness."

But ESSEC Executive MBA Asia-Pacific director and professor of international marketing and geopolitics Cedomir Nestorovic cautioned: "Singaporean companies have to do market research and re-examine their cost structure before trying to enter European markets."

Negotiations for the EUSFTA were launched in 2009, with goods and services talks concluded in 2012, and investment protection negotiations in 2014.

The investment protection elements have since become the EU-Singapore Investment Protection Agreement, which is undergoing ratification by EU member states' regional and national parliaments.